India a safe harbour: K V Kamath

June 08, 2009 13:24 IST

Describing India as a 'safe harbour' for foreign investors, ICICI Bank chairman K V Kamath has said that the country's infrastructure space alone would need $750 billion over the next three years, one-third of which would come from foreign and domestic institutions.

India has emerged as one of the few safe harbours globally after the recent global turmoil and overseas investors have started looking favourably at the country, Kamath told PTI in a telephonic interview from Kyoto, Japan.

"There is an admiration for the country that has grown respectably despite the global crisis . . . there is a huge increase in confidence level . . . global fund houses are seeing India as a safe harbour, a favoured destination," he said.

Kamath noted that it was no mean feat as there were very few safe harbours across the world. "Brazil could be another and China may become the third . . . there are no other major such economies," he added.

"Top of it, it is across-the-board growth here and the investors are seeing India as a growth story -- from financial services to infrastructure to manufacturing to knowledge industry to services space," he said.

Kamath said that infrastructure alone would need $750 billion (about Rs 375,000 crore) over the next three years, one-third of which would come from corporate India and the remaining from the local and overseas institutions through equity or debt.

When pointed out that much progress could not be seen due to the global economic crisis on his earlier projection of an estimated investment of $750 billion in infrastructure, Kamath said the scenario has changed again.

"I would say that the last number we had before the global situation, we were talking about an investment of $750 billion over the next three years. Our assessment now shows that number coming back on the table," he said.

"It's huge money for a period of three years . . . six months ago, it looked like that the number has gone off, but that number is coming back," he added.

When asked about the source of funds for such a massive investment, Kamath said: "I would say, corporate India would generate two-thirds of this and one-third will have to come from either domestic equity or global equity or debt."

"It's confidence that matters . . . Corporate India has now found that India is on a good footing and they have found that global investors are willing to support. I think that gives the confidence to move ahead.

"Global funds which actually were trying to find where they could invest across the world, now fund India as a safe harbour to come in now and invest."